MARCH 12, 2001 VOLUME 8, NUMBER 37
In 1966 Norman Dacy published his now-famous book “How to Avoid Probate.” Dacy’s book made several claims that have since become practically articles of faith: probate is always too expensive, takes too long and requires disclosure of too much information.
The cost of probate has been reduced in most cases since Dacy’s book first appeared. About half of the states still permit executors (often called “personal representatives”) and their lawyers to charge a percentage of the estate’s value as fees. The growing trend, however, is to require the fees of both the personal representative and his or her attorney to be “reasonable.” That usually translates into a much lower fee than the percentage arrangement.
That is not always the case. Robert Sweetland’s estate in the Maine courts illustrates both how fees can consume a large portion of the estate and how courts can stop abuses by personal representatives and attorneys.
Mr. Sweetland had named a Massachusetts friend, Irene Mailhiot, as personal represenative, and the probate court appointed her as the will directed. Ms. Mailhiot then charged the estate fees of $36,000 and travel and other expenses of over $14,000. Since the estate was modest, Ms. Mailhiot collected fees and costs of almost 20% of the estate.
Mr. Sweetland’s will divided his estate among six charities. Ms. Mailhiot sent a form to each beneficiary for signature approving payment of her fees and costs before they would receive any distribution. Five of the six beneficiaries signed and returned forms, but the Maine State Society for the Protection of Animals refused. The Society was entitled to 10% of Mr. Sweetland’s estate, and it decided to challenge the fees.
After a hearing, the probate judge agreed with the Society. The judge noted that Ms. Mailhiot had routinely charged the estate for lunches and dinners at fancy restaurants, and claimed 56 trips to Maine to settle estate business. Her fees were reduced to $10,000 and her costs to $3,000; she was also charged with $4,700 in fees paid by the Society to protect its interests. In total, she was ordered to return more than $40,000 of the $50,000 she had charged the estate.
Ms. Mailhiot appealed the probate judge’s ruling, and made a novel argument. Because five of the six charities had signed waivers of any claims against her before the Society filed its objection, she argued that she should only be required to repay the Society’s share of the $40,000 judgment. In other words, she sought to reduce her repayment to $4,000.
The Maine Supreme Court scoffed at Ms. Mailhiot’s suggestion. She was ordered to repay the entire amount of overcharges to the estate, and was charged additional attorneys’ fees for her appeal. Estate of Sweetland, January 30, 2001.